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PRESS KIT

May 2006 �

A YEAR’S CONTRIBUTION TO SUSTAINABLE DEVELOPMENT

Hypergreen, Copyright: J. Ferrier Architect, Lafarge Media Library

COMMUNICATIONS PRESS RELATIONS Stéphanie Tessier : 33-1 44-34-92-32 stephanie.tessier@lafarge.com

Lucy Wadge : 33-1 44-34-19-47 lucy.wadge@lafarge.com

Louisa Pearce-Smith : 33-1 44-34-18-18 louisa.pearce-smith@lafarge.com

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Contents

Page

Presentation of Lafarge

3

A Year of Sustainable Development

4

Lafarge’s Commitment to Sustainable Development

7

Lafarge’s Challenges in Sustainable Development

8

Lafarge’s Objectives in Sustainable Development

10

Lafarge – a Group Organized to Promote Sustainable Development

12

Working with the Group’s Stakeholders

13

Lafarge’s Environmental, Social and Societal Performance

15

Appendix: Key Dates for Lafarge and Sustainable Development

16

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Presentation of Lafarge Sales: €16 billion Employees 80,000 Countries 76

Cement Aggregates & Concrete WORLD LEADER A wide range of cement products for the construction industry, especially high-performance applications requiring increased durability and resistance. 40 000 employees €7 600 million in sales 122 cement works 24 clinker grinding stations and 6 slag grinding stations In 43 countries

N°2 WORLDWIDE Aggregates, concrete, asphalt and pre-cast concretes produced for several markets. 21 000 employees €5 400 million in sales 567 quarries et 1 141 plants In 27 countries

Roofing Gypsum WORLD LEADER A wide range of clay and concrete roof tiles in many different shapes, colors, surfaces and profiles. 12 000 employees €1 500 million in sales 162 industrial sites In 35 countries

N°3 WORLDWIDE A range of plasterboard products and systems which are manufactured in various lengths, widths and thicknesses, with different characteristics depending intended use. 6 000 employees €1 500 million in sales 78 industrial sites In 23 countries

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A Year of Sustainable Development As a result of this commitment to sustainable development, Lafarge demonstrates that it is at the forefront of its industry. The year 2005 was marked by the mobilization of the Group and its employees, following the tsunami that struck Indonesia in December 2004. The year also marked the renewal of the Group’s partnership with the WWF International; the signing of an agreement on international labor relations with four international labor federations; the signing of a global partnership with Habitat for Humanity; and above all, numerous advances at local level between the Group’s subsidiaries and the communities in which they operate. Lafarge has set itself high ambitions for 2006, mostly notably its commitment to sustainable construction. This is a new challenge, one that requires developing new products and solutions to reduce the ecological footprint of buildings and improve living standards. To achieve these goals, Lafarge can use the leading edge solutions that it has developed, both in its research center and through innovative partnerships with sector players. The Group has also placed safety at the top of its list of priorities for 2006. Lafarge is already the best in its sector, but it wants to rank among the world’s top performing industrial groups. Calendar of Events in Sustainable Development at Lafarge Over the Last Year June 2005: Renewal of its partnership with the WWF for a further 3-year period based on 4 themes: biodiversity, climate change, sustainable construction and the development of initiatives between the two organizations’ local offices to promote environmental protection in the field.

September 2005: Inauguration of a wind park providing half of the needs in terms of electricity of one of the Group’s cement works in Morocco – a worldwide first. Validation by the United Nations Clean Development Mechanism (CDM) Board of the wind park in Morocco.

Wind park and cement works in Tétouan, Maroc. Copyright: Lafarge Media Library

September 2005: The Group signs an agreement with four international workers unions.

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November 2005: Presentation of Hypergreen – a concept of an ecologically friendly tower building developed by Jacques Ferrier in partnership with Lafarge – in Shanghai. Hypergreen was presented at a symposium on the theme of ‘Infrastructure and landscape in the world’s mega-cities’ by Lafarge and Tongji University Hypergreen. Copyright: J. Ferrier Architecte, Lafarge Media Library

January 2006: Lafarge makes the safety of its employees its top priority for the year and sets the objective of becoming an industry leader in safety.

February 2006: Bruno Lafont, Lafarge’s CEO, outlines his strategy to create value for the Group’s shareholders, to further the Group’s lead in innovation and to promote sustainable construction.

Lafarge Research Center at Isle d’Abeau, France. Copyright: Lafarge Media Library

March 2006: Lafarge is listed in the ‘100 Global Most Sustainable Corporations in the World’. list for the second year running.

March 2006: The Group presents Hypergreen at MIPIM, the international real estate event.

March 2006: Lafarge launches the third international employee shareholder plan.

March 2006: Lafarge joins UTC and the World Business Council for Sustainable Development (WBSCD) in launching a 3-year project to promote energy efficient buildings. This alliance is working to determine how buildings can be designed and constructed so that they use no energy from external power grids, are carbon neutral, and can be built and operated at fair market values

March 2006: Lafarge sets up an academic chair in the ‘Science of materials for sustainable construction’ with two of France’s leading academic centers (Ecole Polytechnique, lEcole des Ponts), MIT and Berkeley.

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Ductal viewed at microscopic level. Copyright: Lafarge Media Library

April 2006: A second Clean Development Mechanism in Malaysia, involving the substitution of biomass for fossil fuels, is validated by the CDM Board.

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May 2006: Lafarge is awarded the Trigos 2006, Austria’s most prestigious award for sustainability projects, for its joint project with the WWF: “Schools for a Living Planet”. The project involved teaching biodiversity and the concept of the ecological footprint to children and showing them how to respect the environment. May 2006: The Group publishes its 5th Sustainable Development Report.

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Lafarge’s Commitment to Sustainable Development Lafarge’s commitment to sustainable development is outlined in its ‘Principles of Action’ thus enabling all employees to place their actions within a clear framework. Lafarge has been pursuing a strategy of sustainable development for many years because it believes that long-term value is best created when considering the interests of the community and environment in which it operates. This strategy reflects the Group’s core values and combines industrial know-how, performance, value creation, respect for employees and local cultures, environmental protection and the conservation of natural resources and energy. Performance is, therefore, a long-term issue and encompasses economic profitability, an understanding of all those parties affected by the Group’s activities, a contribution to the improved well-being of society and protecting the environment. This willingness to perform within a sustainable framework is a competitive asset for Lafarge which, as the world leader in building materials, has a duty to lead the way and innovate. For several years Lafarge has sought to develop a long term dialogue with members of the broader community. The best example of this is its partnership with the WWF, which the Group first signed in 2000 and renewed in 2005, in order to improve its environmental performance and contribute to raising standards within the construction industry. Other partnerships have also been signed by the Group, be they at Group or local level, thus illustrating Lafarge’s commitment to improving its social, environmental and economic performance. Since 2003, Lafarge has shown its leadership in the domain of sustainable development by working closely with a permanent stakeholder panel. The panel is made up of representatives from unions, NGOs and the world of architecture.

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Lafarge’s Challenges in Sustainable Development At Lafarge, the challenges posed by environmental and social issues are indistinguishable from its economic challenges. Sustainable development represents for Lafarge the convergence of its humanist values and long-term growth around the world. The building materials industry consumes substantial levels of capital. The construction of a cement works, for example, represents a minimum investment of 150 million euros. Its operating life-time can be counted in decades and it has a significant impact on the environment and local community. The issues posed by sustainable development are current in all of Lafarge’s business lines. In 2000, a list of 250 issues relating to its various activities was developed. This list has been reappraised at various times and since 2003 it has been regularly consulted by the Group’s stakeholder panel, which systematically compares it to other companies. Some of Lafarge’s sustainability issues include: 1. EXTRACTION 2. PRODUCTION Environmental issues - Curb local nuisances (dust, noise, visual impact, traffic, etc.) - Limit the impact of the Group’s sites on biodiversity -Give the Group’s sites a second lease of life once they are taken out of service

Environmental issues - Reduce greenhouse gas emissions - Control local pollution (dust, NOx, S02, persistent pollutants, etc.) - Curb consumption of non-renewable raw materials

Social and community issues - Contribute to local economic development

Social issues - Encourage career development and promotion for all employee throughout their professional lives

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3. TRANSPORT 4. USE Environmental issues - Foster the most environmentally friendly transportation solutions - Curb local nuisances (congestion, dust, noise, etc.)

Environmental issues - Develop products helping to reduce the environmental footprint of buildings throughout their life cycle - Recycle construction waste - Reduce the duration of environmental nuisances (noise, traffic, dust emissions)

Social issues - Develop products that contribute to the safety, health and comfort of those who use buildings - Improve the working conditions of plant workers and increase the ease and speed with which products can be used for convenience purposes

Social issues - Implementation of the Group’s directives on driving and vehicles to transportation workers

Economic and community issues - Maintain the quality of the Group’s products over the long term and anticipate changes in customer demand - Reduce construction time for construction companies by offering products which are easier and quicker to use

5. END OF LIFE 6. REHABILITATION Environmental issues - Recycle demolition waste Social issues - Easy to dismantle products

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Lafarge’s Objectives in Sustainable Development

THE GROUP’S OBJECTIVES

DEADLINE

2005 PROGRESS

MANAGEMENT New target : Continue to check the implementation of the Group’s Competition Policy in its Business Units

Yearly

10 checks

Saftey Set up a Heath and Safety management system in 100% of its Business Units

2005

99%

New target : Halve the 2005 occupational frequency rate for Lafarge employees by 2008 (fr : 3.87)

2008

Base 2005 : fr= 3,87 Target 2008 : fr= 1.93

Environmental Management Undertake an environmental audit of 100% of the Group’s sites within 4 years

Yearly

92%

ENVIRONMENT Reach a rate of 80% of quarries with a rehabilitation plan in line with Lafarge’s standards

2004

71%

Measure the number of facilities equipped with water recycling systems

2005

Objective achieved

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Reduce the amount of production waste going to disposal to the following levels :

�� 1% for the Cement business �� 1.5% for the Roofing business �� 1.5% for the Gypsum business

2005

��0,8%: objective achieved ��2,5% ��0,8%: objective achieved

Reach a level of recycled raw materials use as follows :

�� -10% in the Cement business �� 2% in the Roofing business �� 45% in the Gypsum business

2005

��10%: objective achieved ��0,9% ��50,6%: objective achieved

Emissions Cut worldwide net CO2 emissions per tonne of cement by 20% compared to 1990

2010

12,75% in 2005

Cut absolute gross emissions in Cement in industrialized countries by 10% compared to 1990

2010

8,3% in 2005

Achieve a maximum dust level of 5mg/Nm3 in 100% of the Group’s cement plants by 2010

2010

66% in 2005

SOCIAL

Double the number of female senior managers from 2003 to 2008

2008

9,7% in 2005

Report on training at operational level using the GRI guidelines

2005

Awaiting realization

Double the number of in-house training sessions for managers (Lafarge University) compared to 2003 (500)

2005

1772: objective achieved

Reach a level of 50% of employees holding shares in the Group through the international shareholding plan

2005

49,7%

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Lafarge – a Group Organized to Promote Sustainable Development Strategic decisions are taken by the Sustainable Development Committee chaired by Chief Executive Officer, Bruno Lafont, which meets three times a year. The Group’s sustainability strategy is coordinated by the Senior Vice President for Sustainable Development and Public Affairs, who is assisted by the Vice President for Environmental Affairs and the Vice President for Social Policy. In the field, a network, comprised of the heads of each business unit, is responsible for ensuring that the Group’s sustainability strategy and objectives are implemented. Although this network does not make strategic decisions it offers an important two-way information channel. On the one hand it allows for the diffusion of policies and best practices from the Group, on the other, it enables information from the field to be shared and transmitted to the Group. Lafarge’s activities are essentially local. Plant directors are encouraged to develop a permanent and open dialogue with their local communities. However, dialogue alone is not enough, hence the necessity for concrete action which the local business unit director puts in place in line with the strategy as defined by the Group. The director at local level, who, by definition is focused on operations, is encouraged to develop best practices that can be adapted to similar situations in the field. Moreover, Lafarge believes that sustainable development should not be limited to a few specialists within the Group. Each manager should be aware of his responsibilities and understand the strategic advantages of such an approach. As such, the head of each operational unit is responsible for applying the sustainability objectives on the ground. Individual annual manager appraisals are based partly on sustainability criteria. For instance, the emphasis placed on safety in the workplace is reflected in the way managers are appraised in the Cement Division. In 2005, 25% of their individual bonuses will be linked to their safety record.

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Working with the Group’s Stakeholders The Group’s performance is linked to the ability of its local sites to integrate in the local environment and community. This perennial concern helps Lafarge to develop best practices and nurture its most visible partnerships at Group and local level. Created in 2003, Lafarge's stakeholder panel provides an external view on emerging issues and expresses opinions on the Group's practices in order to help it progress. The role of the panel is to bring a critical view to the Group’s approach to sustainability, to propose ways in which it can progress and give an opinion each year on the Sustainability report.

During the stakeholder panel meeting in November 2005, the following issues were discussed: a diversity policy, responsible lobbying, sustainable construction, Lafarge's efforts in the aftermath of the tsunami in Indonesia and the identification of priorities for the years to come. While the Group believes that the panel is essential and has a genuine influence over its actions, the panel itself would like its comments to be taken into account to a greater extent in the Group’s decision-making. To enhance the quality of the Group’s relationship with the panel, all parties were interviewed on the discussions held and their impact on Lafarge's policy. During 2005, the operating procedures for both parties were formally laid down in a reference document. ������������������� !!"����������������������������

The members of the permanent panel are connected to the different aspects of the Group: unions, NGOs and the world of architecture are represented. This dialogue offers Lafarge the opportunity to learn from the expertise of its stakeholders in areas which extend beyond the traditional scope of its operations. In return, the Group provides its partners with an international and multi-local business perspective as well as funding some of their initiatives. The panel members are: Patrice Ponceau, European Works Council Marion Hellman, Building and Wood Workers International Jean-Paul Jeanrenaud, WWF Philippe Lévêque, Care France Karine Litvack, F&C Asset Management Simon Zadek, Institute of Social and Ethical AccountAbility Livia Tirone, Architect, Tirone Nunes SA Alaistair Mcintosh, Centre for Human Ecology

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Cornelius Theunis Van der Lugt, United Nations Environment Programme (UNEP)

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Lafarge’s International Partnerships: Renewal of Lafarge’s partnership with the WWF International After a five-year partnership, the WWF International and Lafarge renewed their mutual commitment for a further three years. The areas of sustainable construction and persistent pollutants were added to those of climate change and biodiversity. Lafarge also wishes to bolster the initiatives set in motion by the WWF’s local network and the Group’s own business units at local level, notably by funding local projects. CARE International: from consultation to a partnership in the field

�HIV/AIDS prevention center for Lafarge’s employees and their families in Kenya. Copyright: Lafarge Media Library

This partnership outlined the general principles of the Group’s policy in the fight against HIV/AIDS. Long term programs were developed in ten Sub-Saharan countries in which Lafarge operates. The programs that have been launched are dedicated to employees and their families, depending on the local context, but also to local communities through public/ private partnerships.

Initially set up in Africa, this program will gradually be extended to other regions and will include other health issues, such as the fight against malaria. Worldwide partnership signed by Lafarge and Habitat for Humanity in 2005 Through a framework agreement with Habitat for Humanity International (HFHI) in 2005, Lafarge extended and developed, at Group level, a series of partnerships forged over several years in South Korea, the United States, South Africa and the United Kingdom to increase their respective efforts. Lafarge is committed to working with HFHI on access to decent housing for the underprivileged in 25 countries by 2010.

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Habitat for Humanity / Lafarge, Canada

Copyright: Lafarge Media Library

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Lafarge’s environmental, social and societal performance To ensure that its sustainable development indicators are transparent, independent and reliable, Lafarge initiated an external verification process in 2005. International auditors PricewaterhouseCoopers handled the verification of four additional indicators, bringing the number of verified indicators to seven and marking the first stage of the Group’s campaign to produce reliable indicators. Recognized by its peers and by global organizations as being one of the most dynamic and advanced players in the sphere of sustainable development, Lafarge is regularly featured in ethical indices. A recent example is that of the Business in the Community (BITC) Corporate Responsibility Index in the UK. The Sustainability Report Each year, Lafarge’s sustainability report outlines the Group’s environmental and social performance, highlighting year-on-year improvements.

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The report is a collaborative effort between the Group and its permanent stakeholder panel, with members represented from unions, NGOs and architecture. Since, 2003 the stakeholder panel brings an external view of the emerging issues and expresses its opinion on the Group’s practices to help it progress.

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Appendix: Key Dates for Lafarge and Sustainable Development 1833 Lafarge is founded 1930 Lafarge rehabilitates its first quarry at Draveil in France. It is now a protected site 1971 Lafarge signs industrial agreement with the French Environment minister on dust

emissions 1977 The Group publishes the first version of its « Principles of Action » 1982 First use of industrial waste as fuel to reduce CO2 emissions 1992 - Lafarge co-founds the "Companies for the Environment" movement

- The Group publishes its environment policy and first internal report - First recycling initiatives are taken - Launch of the first international employee shareholding plan

1995 - Lafarge co-founds the World Business Council Sustainable Development 1999 Second phase of the international employee shareholding plan 2000 - Lafarge enters the Dow Jones Sustainability Index (DJSI)

- Lafarge signs a partnership with the WWF and becomes a WWF Conservation Partner 2001 First sustainable development report wins award in France 2002 - WBCSD study "Toward a sustainable cement industry" and action plan with 10 other

major cement producers is published - Lafarge enters the Global Business Coalition HIV/AIDS

2003 - Lafarge launches the "Leader for Tomorrow" performance programme and updates its

« Principles of Action » - Stakeholder panel is created - Signature of partnership with CARE 2004 - Signature of the partnership with Transparency International

- Bertrand Collomb, Lafarge’s Chairman presides over the WBCSD

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2005 - Lafarge signs partnership with Habitat for Humanity

- Renewal of partnership with the WWF - Inauguration of a wind park providing electricity to the cement works at Tétouan in Morocco - Validation by the United Nations Clean Development Mechanism (CDM) Board of the wind park in Morocco - The Group signs an agreement with four international workers unions - Presentation of Hypergreen in Shanghai – a concept of an ecologically friendly tower building developed by Jacques Ferrier in partnership with Lafarge – in Shanghai.

2006 - Lafarge makes the safety of its employees its top priority for the year and sets the

objective of becoming an industry leader in safety - Bruno Lafont, Lafarge’s CEO, outlines his strategy for creating value for the Group’s shareholders and furthering the Group’s lead in innovation - Lafarge is listed in the ‘100 Global Most Sustainable Corporations in the World’ list for the second year running - The Group presents Hypergreen at MIPIM, the international real estate event - Third phase of the international employee shareholding plan - Lafarge joins UTC and the World Business Council for Sustainable Development (WBSCD) in launching a 3-year project to promote energy efficient buildings. This alliance is to determine how buildings can be designed and constructed so that they use no energy from external power grids, are carbon neutral, and can be built and operated at fair market values - Lafarge sets up an academic chair in the ‘Science of materials for sustainable construction’ with two of France’s leading academic centers (Ecole Polytechnique, lEcole des Ponts), MIT and Berkeley. - A second Clean Development Mechanism in Malaysia, involving the substitution of biomass for fossil fuels, is validated by the CDM Board - Lafarge is awarded the Trigos 2006, Austria’s most prestigious award for sustainability projects, for its joint project with the WWF: “Schools for a Living Planet”.